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Determinants of insurance adoption among Bulgarian farmers

Author

Listed:
  • Marianne Lefebvre

    (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage)

  • Dimitre Nikolov

    (TU-Sofia - Technical University of Sofia [Bulgaria])

  • Sergio Gomez-Y-Paloma

    (ITU - JRC Institute for Transuranium Elements [Karlsruhe] - JRC - European Commission - Joint Research Centre [Karlsruhe])

  • Minka Chopeva

    (TU-Sofia - Technical University of Sofia [Bulgaria])

Abstract

Purpose – The purpose of this paper is to analyze the determinants of agricultural insurance adoption in Bulgaria, using a purpose-built survey of 224 farmers interviewed in 2011. The insurance decision is analyzed conjointly with other risk management decisions on the farm such as having contracts with retailers or processors, diversifying farm activities and using irrigation. Design/methodology/approach – The agricultural insurance sector in Bulgaria is presented in the broader context of the transition to a market-oriented economy and integration of Bulgarian agriculture into the EU Common Agricultural Policy. The recent developments on the determinants of farm insurance adoption in the agricultural economics and finance literature are discussed. A multivariate probit model is used in order to determine the factors explaining the adoption or non-adoption of various risk management tools by the surveyed farmers, including farm insurance. Findings – The authors find that farmers with diversified activities, using irrigation or having contracts with retailers or processors, are more likely to adopt insurance, after controlling for farms and farmers' structural characteristics. Additionally, the authors find that the main characteristics distinguishing farmers who purchase agricultural insurance from non-users are farm size and farm location. The existence of strong regional effect suggests the importance of adapting the insurance products to the different regional contexts in Bulgaria. Originality/value – This paper contributes to the (limited) literature on agricultural insurance adoption in transition countries, currently shifting from a system where compensation against natural hazards tended to come from a State damage mitigation fund, inherited from the centrally planned governments to private and voluntary agricultural insurance. This research provides a unique data source on the Bulgarian case study. Keywords Risk management, Bulgaria, Agricultural insurance, Common agricultural policy, Multivariate probit

Suggested Citation

  • Marianne Lefebvre & Dimitre Nikolov & Sergio Gomez-Y-Paloma & Minka Chopeva, 2014. "Determinants of insurance adoption among Bulgarian farmers," Post-Print hal-01416155, HAL.
    • Handle: RePEc:hal:journl:hal-01416155
    DOI: 10.1108/AFR-05-2013-0022
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    Cited by:

    1. Martinson Ankrah Twumasi & Yuansheng Jiang & Evans B. Ntiamoah & Selorm Akaba & Kwabena N. Darfor & Linda K. Boateng, 2022. "Access to credit and farmland abandonment nexus: The case of rural Ghana," Natural Resources Forum, Blackwell Publishing, vol. 46(1), pages 3-20, February.
    2. Giampietri, Elisa & Yu, Xiaohua & Trestini, Samuele, 2020. "The role of trust and perceived barriers on farmer’s intention to adopt risk management tools," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 9(1), April.
    3. Ruggiero Rippo & Simone Cerroni, 2023. "Farmers' participation in the Income Stabilisation Tool: Evidence from the apple sector in Italy," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 273-294, February.
    4. Davidson, Kelly A. & Goodrich, Brittney K., 2020. "Nudge to Insure: Can Informational Nudges Increase Enrollment in Pasture, Rangeland and Forage Rainfall Index Insurance?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304550, Agricultural and Applied Economics Association.
    5. Mbonane, Nobuhle Duduzile, 2018. "An analysis of farmers’ preferences for crop insurance: a case of maize farmers in Swaziland," Research Theses 334771, Collaborative Masters Program in Agricultural and Applied Economics.
    6. Codruţa Mare & Daniela Manaţe & Gabriela-Mihaela Mureşan & Simona Laura Dragoş & Cristian Mihai Dragoş & Alexandra-Anca Purcel, 2022. "Machine Learning Models for Predicting Romanian Farmers’ Purchase of Crop Insurance," Mathematics, MDPI, vol. 10(19), pages 1-13, October.
    7. Lefebvre, Marianne & Gomez y Paloma, Sergio & Viaggi, Davide, 2014. "EU farmers' intentions to invest in 2014-2020: complementarity between asset classes," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182737, European Association of Agricultural Economists.
    8. Bertolozzi-Caredio, Daniele & Bardají, Isabel & Garrido, Alberto & Berry, Robert & Bijttebier, Jo & Gavrilescu, Camelia & Harizanova, Hristina & Jendrzejewski, Błażej & Meuwissen, Miranda M.P. & Ollen, 2021. "Stakeholder perspectives to improve risk management in European farming systems," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 84, pages 147-161.

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